### No. 80-187 IN THE SUPREME COURT OF THE STATE 

### OF MONTANA 1981

BRUCE E. KEASTER and JANET M. KEASTER,husband and wife, Plaintiffs and Respondents,

VS. 

### ANDY BOZIK, a singleman; FEDERAL LAND BANK OF SPOKANE, et al., Defendantsand Appellants.

Appeal from: District Court of the Eighth Judicial District, In and for the County of Cascade. Honorable John McCarvel, Judge presiding. Counsel of Record: For Appellants: Robert J. Emrnons, Great Falls,Montana For Respondents: Graybill, Ostrem,Warner and Crotty,Great Falls,Montana

Submitted on briefs: November 26, 

### 1980 Decided:

# KB 11,

## 1981 Filed:

## fE8

# :bMr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Bruce E. and JanetKeaster brought thisaction for specificperformance of 

### a real estate option in the Cascade County District Court on April 14, 1978. The District Court entered a judgment requiring defendant Andy Bozik to comply with the 

### terms of the option and awarding actual damages of $15,300 to the plaintiffs and $5,200 to the defendant. Defendant Andy Bozik appeals. Bruce Keaster, the buyer, and Andy Bozik, the seller, entered into an option topurchase 

### real 

### estate on April 15, 1977. The option contained a legal description of the subject property, 899 acres of Bozik's land. The agreement 

### was a standard Farm Home Administration (FHA) option contract and included the following 

### term. "The offerherein shallremain irrevocable for 

### a period of sixmonths from the datehereof and shallremain in force thereafter until one (1) year from the datehereof unless 

### earlier 

### terminated by the Seller. The Sellermay terminate thisoffer at any time afterthe six (6)months' irrevocable period provided hereinby giving to theBuyer ten (10)days' written notice of intention to terminate at the address of the Buyer. Acceptance of thisoption by the Buyer within ten (10)days af

### ter such notice 

### is received by him shall constitute a valid acceptance of the option." The option signed on April 15, 1977, stated 

### a considerationof "$5.00 inhand paid and othervaluable consideration" and furtherprovided that "thisoption is given to enable the Buyer to obtain 

### a loan insured ormade by theUnited Statesof America, acting through the Farmers Home Administration, United StatesDepartment of Agriculture

# .. . for the purchase of said property. It is agreed thatthe Buyer's efforts toobtain a loan constitute a part of the consideration forthisoption. 

# .

# ."
The sales price 

### was $200,000, $56,000 as a down payment and $144,000 over 30 years at 6%interest (annualpayment of$10,461.00). The contract was amended on April 26, 1977, to make the contract payable over 20 years atan annual payment of $12,554.57. On May 2, 1977, Keaster and Bozik signed a "declaration of interest and agreement" acknowledging the option to purchase. This document was recorded with the Cascade County clerk and recorder on May 25, 1977. InearlyApril of 1978, respondent Bruce Keaster attempted 

### to exercise the option. Appellant Andy Bozik refused to convey the property. Following the commencement of this actionon April 14, 1978, Andy Bozik filed a counterclaim seeking reformation of the contract and actual damages for

### Keaster's use of hispasture. The damages 

### arose from a separate transaction and arenot an issue here. Trial commenced on January 17, 1980. During the proceedings respondent's counsel introduced evidence of actual damages suffered by Keaster af

### ter the filing of the complaint. He sought 

### to amend the pleadings 

### to include a prayer fordamages for 

### loss of crops and pasturage occasioned by the appellant's refusal 

### toconvey the property. The District Court allowed the amendment. Testimony adduced at trial reveals thatBruce Keaster and Andy Bozik 

### met several 

### times in

### lateMarch 

### or earlyApril of 1977 innegotiating the option. 

### Keaster proposed an optionwhich provided for 

### a $60,000 down payment and interestat4%. Bozik refused the down payment amount for income tax reasons and objected to the interest

### rate. The transcript alsoreveals that the appellant never attempted to give a written notice of termination. Bozik testified that although Keaster and Roger Smith, the FHA county supervisor, told him thatwritten notice 

### was required, he believed

an oral notice 

### was sufficient since the document 

### was never notarized. In addition Bozik testified thathe had a copy of theoption agreement for the entireperiod. Appellant testified thathe told the respondent and Roger Smith

### more than sixmonths afterthe option was signed thathe

was not going to sell. Keaster testified that the firsttime he learned of the appellant's intention not 

### to comply with the option was on April 6, 1978. Keaster stated thaton thatday he presented a written notice of acceptance of the option, an earnestmoney check for $1,000 and a buy-sell agreement to Bozik at Bozik's residence. The notice of acceptance was drafted by respondent's attorney and dated April 

### 5, 1978, and the check was datedApril 6, 1978. Bozik testified thatKeaster presented the check to him on April 14, 1978, and thathe had never seen the otherdocuments. The FHA certified and approved Bruce and JanetKeaster for

a loan of $46,000 prior 

### to the expiration of the option period. The Keasters had alsoarranged to

### borrow $10,000 from a third party and had arranged to obtain$56,000 from the BeltValley Bank for the down payment until they received the loanproceeds from the FHA and the third party. Attrial con£licting evidencewas presented regarding the negotiations of the parties and their conduct before and af

### ter the signing of the agreement and atthe 

### timeof the attempted exercise of the option. Of primary significance is an oral agreement that the parties intended Bozik to have the use of a house and garage on the property for as long ashe desired. Bruce Keaster testified that atthe time the option contract was executed it was agreed thatAndy Bozik would have the use of the house and garage, but not the use of the otherbuildings. He understood thatBozik was to have "something like" a life estate inthe house and garage. When asked why thisprovision was not included in the option, he testified that it was his impression that thisprovision would be put inupon closing. Andy Bozik testified that it 

### was his understanding thatnone of the buildings 

### were tobe included inthe sale. -4-The 

### District Court entered 

### its findingsof fact, conclusionsof 

### law and judgment on February 15, 1980. The court found that the parties had agreed thatAndy Bozik would have the use and occupancy of the house and garage located on the property for

as long as he chooses to live there; that the option

### was never revoked according 

### to its 

### terms; thatBruce Keaster gave written notice of his acceptance of the option on April 6, 1978; that Andy Bozik breached the option agreement on the 

### same dateby refusing to sell; that the plaintiffsbecame entitled 

### to the possession of the property except the house and garage on April 6, 1978; that the plaintiffs

### were entitled to $15,300 forthe 

### loss of profits for the 1978 and 1979crop seasons; and thatAndy Bozik 

### was entitled to $5,200 forpasture rental arising from a separate transaction. The court concluded that the option



### was valid and properly exercised and that the plaintiffs



### were entitled to specificperformance of the agreement. Andy Bozik was given "the use and occupancy of the residence and garage for 

### as long 

### as he chooses 

### to live there." Appellant Bozik asserts numerous specifications of 

### error which can be consolidated into the following major issues: 1) Whether the District Court erred inallowing the amendment of the complaint during the trial to include damages for lossof the use of the property? 2)Whether there

### was adequate consideration to support specificenforcement of the option? 3) Whether the option

### was sufficientlycomplete and definite to afford the remedy of specificperformance? The issue concerning amendment of the complaint during trial is governed by the second sentence of Rule 15(b), M.R.Civ.P., which states: "If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may 

### allow the pleadings to be amended and shalldo 

### so freelywhen the presentation of the 

### merits of the actionwillbe subserved thereby and the objecting party failsto satisfythe court thatthe admission of such evidence would prejudice him inmaintaining his action 

### or defense upon the 

### merits. The court may grant a continuance to enable the objecting party to

### meet such evidence

# ."

It is within the discretionof the trial court whether to allow such amendment. Nothing in the record indicates an abuse of discretion. Attrial, Bozik's counsel objected to admission of testimony by Keaster as 

### to damages for the use of the property and for 

### loss of profits for the crop seasons of 1978and 1979, and furtherobjected 

### to the Keaster's motion to amend the pleadings. The trial court allowed an offerof proof and reserved ruling until briefs 

### were submitted aftertrial. The decision of the court to allow the amendment 

### was based upon the prayer inthe complaint for "such other and further relief as the Court deems just and proper.

### " Appellant claims he 

### was denied the opportunity to prepare his

### case on the issue and therefore 

### was denied due process. He further 

### states that respondent knew of the 

### claim prior to trial and should have filed a supplemental pleading 

### or amended the pretrial order. Respondent 

### asserts that appellant could not have been surprised by a claim fordamages which flowed naturally from appellant's refusal to perform the contract. The amendment sought by the Keasters during trial did not change the theory of liability

### or affect the entirecomplexion of the lawsuit, as did the amendments sought and refused by the trial court inBrothers v. SurplusTractor Parts Corporation (1973), 161Mont. 412, 506 P.2d 1362, and Montgomery v. Gehring (1965), 145Mont. 278, 400 P.2d 403. It is within the trial court's discretion to allow amendment of the pleadings during trial if the objecting party failsto show that an amendment would result inprejudice. The failureof respondents 

### to filea supplemental pleading orto amend the pretrial order as soon 

### as the damages accrued is not in itself sufficientto compel denial of a motiontoamend during trial. Union Interchange, Inc. v. Parker (1960), 138Mont. 348, 357 P.2d 339. While Rule 16, M.R.Civ.P., 

### states that the pretrial order is to control the subsequent course of action, it furtherprovides formodification atthe trial. Appellant is inno position to complain of a denial of due process sincehe made no motion for a continuance 

### to enable him 

### todefend against 

### Keaster's 

### claim fordamages. Union Interchange, supra, and Clack v. Clack (1935), 98Mont. 552, 41 P.2d 32. With regard to the second issue, appellant relies upon section 27-1-415 (I),MCA, which provides: "Specific performance cannot be enforced against a party to a contract

# . . . "(1) if he has not received an adequate consideration for the contract. " It 

### is argued that fivedollars is not adequate consideration for

a contract that "ties up" land worth $200,000 forone year. This argument, however, distortsthe facts. The option recited considerationof five dollars and othervaluable consideration. The buyers' efforts to obtain an FHA loanexpressly constituted part of the consideration. The option 

### was irrevocable for sixmonths, afterwhich the appellant could have revoked by giving written not

### ice.In support of his argument, Appellant Bozik 

### cites Rude v. Levy (1908), 43 Colo. 482, 96 P. 560, wherein it 

### was held that consideration of one dollar

### was inadequate for an option to purchase land worth $900. 

### We decline 

### to follow thisview. The parties, from equal bargaining positions, agreed upon the amount of considerationwhich they deemed sufficient to support the option. In the absence of evidence of fraud, if the purchase price for the land is adequate, even nominal consideration is adequate to support an option. Brooks v. LeGrand (Okla. 1967), 435 P.2d 142. See 

### also Honeyfield v. Lambeth (Mo.App. 1975), 519 S.W.2d 342; Board of Control of Eastern MichiganUniv. v. Burgess(1973), 45Mich.App. 183, 206 N.W.2d 256; Allen v. Rakes (1971), 359 Mass. 1, 267 N.E.2d 628. The consideration recited by the option

### was sufficient 

### to create a valid contract aswellas adequate to

### allow the equitable remedy of specificperformance. Appellant next contends that the contract 

### was not suf

### ficiently complete and definite to be afforded the remedy of specificperformance. Section 27-1-412(6), MCA, provides: "The following obligations cannot be specificallyenforced:

"(6)an agreement the 

### terms of which 

### are not sufficiently certain to make the precise 

### act which is tobe done clearlyascertainable." Appellant Bozik asserts that the option

### was deficient for 

### two

reasons. First, he 

### asserts that the use and occupancy of the house and garage orthe exclusion of all the buildings 

### was a 

### material element leftout of the contract. Second, it is asserted that the failure to specify a date for the down payment, the annual payments and the commencement of interest is fatal. On the other hand, the respondent contends that all the material elements of the contract 

### are included and that any terms not included in the contract 

### are 

### collateral. Itmust be noted atthe outset that the option contract as written and signed by the parties contains no ambiguity and is sufficiently definitive to be capable of specific enforcement when one looks solelyto the four corners of the instrument. The option contract contains a legalproperty description, expresses the consideration for the grant of the option, states the 

### terms fora revocation, provides the time inwhich the option is exercisable, reveals the purchase price including the amount of down payment and annual payment, and states the interest rate. Inaddition the contract states that it includes a full statement of any reservations 

### or exceptions and furtherhas leftblank a clause that 

### states "Insert here conditions peculiar to this

### particular transaction

# ."
In his counterclaim, Appellant Bozik sought reformation ofthe contract to include a reservation of the farm house, garage and other outbuildings together with the land upon which the buildings are located. He alleged thatby mutual mistake and inadvertence this

### material part of the contract between the par

### ties was omitted from the writing. Attrial the testimony concerning the parties' intentions with regard 

### to the buildings 

### was conflicting. Keaster testified thatduring the negotiations prior to the execution of the option, the parties agreed thatBozik was 

### to have the right to

use the house and garage for as long 

### as he wanted to live there. He understood the house and garage 

### were not 

### to be excluded from the sale, but Bozik would have "something like" a life estate. Bozik testified thatprior to executing the option he had told Keaster the buildings 

### were not for sale. Histestimony also revealed that he 

### was under financialpressures to 

### sell the property, and that those pressures had diminished subsequent to the date of the option agreement. By September of 1977, Bozik no longerwanted to 

### sell any of hisproperty. On the basis of the evidence, the trial court found that the parties had reached a mutual understanding thatBozik would be allowed 

### to use the house and garage for as long 

### as he desired. According 

### to Rule 52(a), M.R.Civ.P.: 

### "

# ..

# .Findings of fact shall not be 

### set aside unless clearlyerroneous, and due regard shall be given to the opportunity of the trial court tojudge of the credibility of the witnesses." There is sufficientevidence to support the finding 

### of the trial court. Without stating specifically that it 

### was doing so, the trial court reformed the contract to reflect the intentions of the parties as it found them tobe at the time the contract was executed. When by mutual mistake the agreement of the parties is not contained in the written instrument, the instrument may be reformed so as toexpress that intention. Section 28-2-1611,MCA. The 

### trial court did not reach beyond the evidence 

### to supply

a 

### termnot agreed upon by the parties. The evidence showed that theparties had a general understanding thatBozik would be allowed 

### to remain in hishome, but they had not determined whether Bozik was to have a life

### estate or some other interest. Both parties believed they could make the necessary changes in the documents at the 

### timeof closing. However, since the appellant refused to honor the optionwhen it 

### was exercised, the proposed contract fordeed 

### was not finalized and executed. As a result the oral agreement 

### was not reduced to writing. It 

### was within the equitable power of the trial court to correct this mistake by reforming the contract, and then specifically enforcing it. Section 28-2-1614, MCA. The contract as reformed

was sufficientlydefinite and complete with regard to the subject matter to allow specificperformance

# . Appellant further contends the option 

### was incomplete in that it failed to specify dates for the down payment, the annual payments, and the commencement of the intereston the unpaid balance. The option contract as finalized by theparties included the following 

### term: "The total purchase price for said property is Two Hundred Thousand Dollars; said amount payable

# . .. $56,000.00 asa down payment; balance of $144,000.00 on a contract fordeed, payable atthe 

### rate of $12,554.57 per annum for the 

### termof 20 years. Interest at 6%per annum. Copy of the proposed contract attached hereto.

### " It 

### is clear from the proposed contract fordeed that the parties contemplated themaking of the down payment on the date the contract was executed, with interestto commence on thatdate. The date supplied by the proposed contract for the annual payments 

### was December 1of each year, commencing in 1978. The buy-sell agreement tendered at the 

### time of the attempted exercise of the option provided thatpossession of the property 

### was to be delivered on April 15, 1978, which 

### was the end of the option period.



## - 10

## -The fact that these terms 

### were not specifically expressed inthe option contract does not render the option unenforceable. It 

### is 

### well settled that absolute certainty inevery detail is not

a prerequisite for specificperformance. Gropp v. Lotton (1972), 160Mont. 415, 503 P.2d 661; Steen v. Rustad (1957), 132 Mont. 96, 313 P.2d 1014. Those matters which are collateral 

### or which go 

### to the performance of the contract are not essential and need not be expressed in the contract. Steenv. Rustad, supra; Johnson v. Elliot (1950), 123Mont. 597, 218 P.2d 703. When the 

### timeof performance is not specified, a reasonable 

### timewillbe implied. Section 28-3-601, MCA. The trial court has the inherent power to set up a schedule for the performance of the obligations and the commencement of interest. Rogers v. Relyea (1979)t Mont

# . , 601 P.2d 37, 36 St.Rep. 1706. These adjustments 

### are necessary to implement the decree of specific performance. The judgment of the District Court is a£firmed, and the

case is remanded for furtherorders specifically enforcing the contract consistent with this opinion.

Chief Justice 

### We concur:

This cause 

### was submitted prior toJanuary 5, 1981.